The community sector may have mandated increases to staff wages by the middle of the year, but who will foot the bill?
THE community sector is set for a shake-up this year if Fair Work Australia decides to support the Australian Services Union’s case for a wage increase for non-profit workers.
If the ASU bid is successful, it would represent a pay rise of between 20 and 50 per cent over four to five years.
While Western Australian non-profits are unequivocally in favour of the increase, sourcing the funds to pay for the increase remains problematic.
At a Centre for Social Impact panel discussion last week, some of WA’s industry leaders and government representatives spoke of their concerns not only about where the money is going to come from, but who stands to lose if no-one is prepared to foot the bill.
In addition, the panel questioned whether additional government funding could make the contracts attractive to private commercial businesses.
WA Council of Social Services president and Mercy Care chief executive Chris Hall said that, at a fundamental level, a sustainable approach was imperative to delivering services and avoiding repercussions for the individuals accessing services.
“I am not talking about the sustainability of organisations per se, I am talking about the importance of the sustainability of services that are provided to the communities in WA,” he said.
“Reduction or closure of services and impact upon organisations are real possibilities.”
Centre for Social Impact director social business and former Australian Democrats leader Cheryl Kernot said the governments, federal or state, were yet to sign on the dotted line, a position that had no doubt left the industry on edge.
“If there is no commensurate increase in funding, how will community organisations respond to that?” she asked.
Centre for Social Impact WA director Paul Flatau said the federal government made some changes to its position in early March and announced its intention to work with state governments and organisations to deliver the funding.
“To what degree, is the question,” he said.
“My view is the government will come in with extra funding. Even though the WA government hasn’t made a submission to the equal pay case, I would imagine they would be relatively supportive as well.”
Even if the government is going to fully subsidise the cost of the increase for government-funded organisations, panellists highlighted the fact that not all community-focused organisations are government funded.
Mr Flatau said the government would fund the increase but that organisations needed to pay attention to whether their other funding bodies would increase their support in lieu of the change.
“It is not simply whether the government funds it, it is whether other organisations come to the party also,” he said.
The panellists said non-profit organisations had developed into sophisticated businesses since the early days of the sector, but what had been lacking was the value placed on the provision of services.
“We are not little organisations selling lamingtons and running volunteer support groups anymore,” Senses Foundation chief executive Debbie Karasinski said.
Organisations should start insisting on full cost recovery for services provided through government contracts, the panellists agreed.
Mr Hall believes having to find monies to subsidise government-funded programs is wrong.
“There should be full cost recovery from government for the provision of government contracted services so it frees up our monies that we generate as organisations, to be able to deliver those services and programs that we know need to be delivered to the community but might not be politically practical at times,” Mr Hall said.
Ms Karasinski said this would not change until the sector priced its services more realistically.
“We need to value, really value what it is that we do, understand the value, effectively cost what we do and engage in that mature conversation rather than a grace and favour relationship,” she said.
But it isn’t right to place all the blame on the community sector, according to the Department of Premier and Cabinet executive director Rebecca Brown.
“Some of it is to do with community sector behaviour, a lot of it is to do with public sector behaviour,” Ms Brown said.
Amid the push for wage increases in the sector, the Barnett government, through the Department of Premier and Cabinet, has developed a partnership forum with WA’s community sector.
Ms Brown said for the past two years that forum had led to issues being more freely and openly discussed.
“One of the key reasons is the absolute confusion between whether it is a contract for the purchase of services, or whether it is a grant,” she said.
The administrative burden of reporting on the use of contracted money over grant money was highlighted as an example of the government/non-profit relationship issues.
For all the challenges that lie ahead, the panel agreed that moving away from government-prescriptive and ineffective costing would have major benefits in developing sustainability of services through increasing staff retention and lowering staff burnout.
